EU Commission Proposes Adding €4 Billion in Carbon Allowances to Industry in ETS Update

On 12 May 2026,The European Commission unveiled its revised EU Emissions Trading System (ETS) benchmark framework for 2026–2030, strategically balancing aggressive climate targets with industrial solvency. A primary highlight is the expansion of free allocations to encompass indirect emissions from electricity use across 14 product benchmarks. This adjustment is projected to provide industrial stakeholders with approximately €4 billion in incremental value through the end of the decade.Despite a general tightening of efficiency benchmarks, the Commission ensures that industry will, on average, continue to receive free allocations for 75% of emissions, mitigating sudden surges in allowance acquisition costs.Moreover, the proposal introduces sector-specific fallback benchmarks to better reflect varied decarbonization trajectories and protect against disproportionate allowance reductions in hard-to-abate sectors. These measures offer essential regulatory and fiscal visibility ahead of a comprehensive ETS review scheduled for July 2026, reinforcing the system’s role as a primary driver of clean technology investment.

Source:https://www.esgtoday.com/eu-commission-proposes-ets-update-adding-e4-billion-in-allowances-to-industry/